Which case won?

casea
The case for the husband
  • The trial judge was wrong to divide the marital property into two pools to distinguish between the lottery winnings and the other property. My ex-wife bought the lottery ticket with joint funds, therefore the winnings should be part of an overall asset pool.
  • Given that I owned several properties when we got married, I should have received at least 66% of the other property. Giving me only 50% of Pool 1 was plainly wrong.
  • The trial judge was wrong in finding that I should have sole responsibility for the business in which my ex-wife and I were partners. The business has incurred a loss over the last three years, the only option is to sell it and it is unfair that I should be solely responsible for disposing of it.
  • My ex-wife has $1.2 million in unexplained expenditure since 2009. This amount should be added back as a notional asset against my ex-wife as part of the asset split.
caseb
The case for the wife
  • The money I used to buy the lottery ticket did not come from “joint funds”, it was my money. At the time of the win my ex-husband and I were leading separate lives and were financially independent of one another.
  • There was money owing on the properties my husband owned at the time we married. If this were not the case, he would have produced evidence to prove the properties were unencumbered. He did not do this.
  • I have had nothing to do with the business in the last five years. It is fair for my husband to continue with the sole responsibility and decision-making for the business that he’s exercised over this period.
  • I have accounted for the bulk of my expenditure since 2009. The remaining amount is far less than my husband’s unexplained expenditure.

So, which case won?

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Case A Case B

Case B won. You were right!

How people voted
a34%
b66%

Expert commentary on the court's decision

“The case Eufrosin & Eufrosin is an example of the court dealing with the division of the property of a marriage at the time of the hearing, and in particular, the court taking into consideration the circumstances of each individual case before it.”
Full Court of the Family Court dismisses husband’s appeal

In the case Eufrosin & Eufrosin [2014] FamCAFC 191, the appeal court rejected the husband’s claim that because the winning ticket had been purchased with joint funds, the winnings should form part of a combined asset pool. The source of the funds was found to be irrelevant.

Instead, the court found what was relevant was the nature of the parties’ relationship at the time the lottery ticket was purchased. At that time, the marriage had dissolved, the parties had separate finances and there was no longer a common use of property. Rather, the parties were using funds for their respective individual purchases.

This led the court to determine that the lottery win post-separation should be excluded from the total net asset pool and that it was appropriate in this case to have a two-pool approach to the assets available for distribution.

Initial contribution to the marriage

The court considered the husband’s claim to “at least 66%” of the matrimonial assets, based on his assertion that he owned unencumbered properties at the time of the marriage.

This assertion was undermined by evidence that the properties had been used to secure loans for other property purchases prior to the marriage, as well as by the husband’s failure to produce any evidence that the properties were unencumbered at the time of the marriage.

Further, the court noted that when determining the asset split, weight must be given to a contribution which a party makes shortly before a separation. However, less weight is given to a contribution made by one of the parties early in the cohabitation period of a long marriage, particularly where the contribution has gone into the parties’ assets or been used in the payment of family expenses.

Responsibility for the business and claims of unexplained expenditure

The court disagreed with the husband’s contention that there was no option but to sell the business. The court found that the husband had had sole responsibility for the business up until the trial, that there was no evidence the business could not be sold and that the trial judge was correct in deciding the husband should retain the business.

With regard to conflicting claims of unexplained expenditure, the appeal found that there had been no error on the part of the trial judge.

Noting that add-backs of the type proposed by the husband were the exception rather than the rule, the court found that the adjustment of $500,000 made by the trial judge in favour of the husband was appropriate in light of the husband’s future earning capacity and the difference between the parties’ financial resources.

This adjustment was in keeping with section 75(2) of the Family Law Act.

Husband required to pay wife’s costs of the appeal

Section 117 of the Family Law Act states that subject to other sections of the Act, each party to proceedings under the Act shall bear his or her own costs.

The court decided that there were two reasons why the husband should pay the wife’s costs of the appeal.

The first was the sum of $1.2 million which the husband had received as a result of the trial judge’s orders (including a substantial cash payment from the wife). The second was the fact that the husband had been wholly unsuccessful on every ground of his appeal.

Given that the costs of the appeal would have been substantial, the husband harmed his own financial position by pursuing the appeal – the opposite of what he was trying to achieve by going back to court.

It comes back to the old principle: avoid litigation if you possibly can, because court outcomes can be unpredictable.

Factors taken into consideration when determining just and equitable orders

The case Eufrosin & Eufrosin is an example of the court dealing with the division of the property of a marriage at the time of the hearing, and in particular, the court taking into consideration the circumstances of each individual case before it.

Many factors are taken into consideration when determining just and equitable orders and often include a number of discretionary assessments and judgment of many components of contribution, only some of which are capable of measurement in money terms.

Section 79 of the Family Law Act allows for the essential task of assessing the nature, form and extent of the contributions of all types made by each of the parties within the context of their particular relationship.

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